"Mr Osborne will savage as “grossly irresponsible” any attempt by Mr Brown to borrow his way out of trouble. Instead, he will unveil details of a new set of rules, policed by an independent body, aimed at bringing debt down. “It is a forward-looking fiscal policy that is at the forefront of academic thinking anywhere in the world,” said one official with knowledge of Mr Osborne’s plans.

Aides also confirm that he will continue to prepare the ground to abandon a pledge to match Labour’s public spending totals. The announcement of the new framework is the culmination of a long campaign around the slogan that Mr Brown “failed to fix the roof when the sun was shining”. The decision to focus on debt was taken after Tory strategists studied the 1996 Australian federal electioncampaign, The Times has learnt."

But tweaking Gordo's debt rule doesn't answer the big criticism of the existing framework. Which is - as BOM readers will know - the lack of that third fiscal rule directly limiting the growth of public spending (see many previous blogs eg here). And that's a rule that really is at the forefront of academic thinking, including the brainboxes at the OECD.

After a decade of rising taxes, simply stabilising the existing fiscal position is not enough. We need a clear strategy for cutting taxes in a world of economic stagnation. That in turn means a programme to cut public spending as a percentage of GDP.

Just like in the 70s/80s, public spending must be hacked back to make room for wealth creation. It's painful, but it has to be done.

BOM the book now available

Drawing on six years of blogging government waste, this book shows how we spend far more than we need on our public services. It sets out the facts and explores the underlying issues. Just why does government spend so much and deliver such second rate service? Why do we put up with it? And what are the alternatives?

ABOUT BOM

Despite all the talk of cuts, government still consumes nearly half our national income. Yet many tens of billions of its spending is wasted, with taxpayers made to pick up the tab for a depressing array of overpriced sub-standard services. This is money we can no longer afford, and our National Debt is already at danger level.

If we're to avoid further decades of stagnation and austerity we urgently need to find another way. Exposing and understanding the wastefulness of government is a necessary step in the right direction.